Valin approves 3.15 billion yuan third phase at VAMA, its automotive steel venture with ArcelorMittal

Chinese steelmaker Hunan Valin Steel (华菱钢铁, 000932.SZ) said on 9 November that its subsidiary Valin ArcelorMittal Automotive Steel (VAMA), a 50/50 joint venture with ArcelorMittal, will carry out the third phase of its automotive steel plant. The investment is estimated at 3.147 billion yuan, tax included. The project was approved 9–0 at the 12th meeting of Valin's ninth board of directors and, according to the filing, does not need a shareholder vote and is not a related-party transaction. By publication time CSP had not found a separate ArcelorMittal statement on the decision.

The third phase includes a vacuum-coating (JVD) line with capacity of 850,000 tonnes a year and a continuous annealing line of 1 million tonnes a year, on VAMA's existing site. The products will be cold-formed automotive steels: ultra-high-strength steel (UHSS, martensitic), advanced high-strength steel (AHSS) and exposed outer body panels. The company says it will bring in 'several new steel grades' from ArcelorMittal. With the project, VAMA's annual galvanising capacity rises from 2 million to 3 million tonnes.

Of the 3.147 billion yuan total, 2.328 billion is equipment, 487 million civil works, 184 million installation and materials and 148 million other costs. VAMA will fund the project on its own, with 50% equity and 50% bank loans. Construction is expected to take 28 months. Valin estimates an after-tax internal rate of return of 15.6% and a payback period of 9 years, excluding the 2-year construction period, as the filing puts it.

According to Valin, JVD is ArcelorMittal's 'globally unique' technology and will 'fill a gap' in China's high-end automotive sheet. The company says the process allows very thin coatings, high corrosion resistance and lower risk of hydrogen embrittlement, and makes far better use of zinc and consumes less raw material than conventional hot-dip galvanising and electrogalvanising. In August 2025, in a reply on its investor-relations platform (as reported by Stockstar), Valin said that at ArcelorMittal's European plants JVD is used mainly for household appliances and general industry, with a small share in cars.

The filing itself lists the risks. Key JVD equipment will come from abroad with long lead times, and as a new technology it may take a long time to reach full output. On the market side, Valin cites slow certification by carmakers, resistance to relying on a single supplier and low willingness to pay more. In response, it says it will lock in target customers early and that the route 'may replicate' the one used for hot-stamping steel: first trial sales of imported material for certification and, after the third phase reaches volume production, full replacement of imports.

VAMA was set up in September 2010. Phase one started production in June 2014 and phase two in April 2023, for total design capacity of 2 million tonnes. In 2025 VAMA had revenue of 11.03 billion yuan and net profit of 1.97 billion; in the first half of 2026, revenue of 4.193 billion and net profit of 653 million, according to Valin. The parent is faring worse: Valin's net profit attributable to shareholders fell 90.04% in the first nine months of 2026, to 250 million yuan, according to National Business Daily.

The decision follows a process that began in early April 2025, when Hunan Steel Group (湖南钢铁集团) and ArcelorMittal signed a strategic partnership agreement to take the third phase forward and set up a global automotive steel research centre in Hunan, according to The Paper. On 4 November 2026 Valin told China Steel News that the two partners had signed the project's package of agreements in the first half of the year and that both shareholders' decision processes were under way.

CSP analysis: for buyers of automotive steel in China, the change is not immediate. With a 28-month build and no start date disclosed, local JVD output is unlikely before 2029, and Valin itself expects to open the market with imported material first. Carmakers and tier suppliers that want to use it can start certification earlier, while exporters of high-end sheet to China should expect a local competitor from then on. This reading is ours, not Valin's or ArcelorMittal's.